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Library Overview

Learn about the funding challenges faced by West Richland Library and explore the future options for library services. Discover the current contract with Mid-Columbia Library District and the potential for alternative providers.

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Library Overview

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  1. Town Hall Library Overview June 14, 2016

  2. West Richland Library Background • City of West Richland has contracted with Mid-Columbia Library District (MCL) for 48 years • West Richland branch is part of the Mid-Columbia Library System • The City essentially leases the staff, collections, and equipment from MCL • The City owns and maintains the building and grounds. These costs are paid by the City in addition to the contract fee paid to MCL. • The West Richland branch not only serves West Richland residents, but also serves any resident of the MCL service area including residents of the surrounding unincorporated Benton County.

  3. 2003 Special Election • In 2003, Proposition No. 1 was approved by West Richland voters which imposed a two and one half percent (2.5%) tax on natural gas, electric, and telephone utility consumption for citizens in West Richland in order to finance the West Richland library.

  4. Library Fund 121 • Library revenues and expenses are accounted for in a special revenue fund called Library Fund 121

  5. Library Revenue Sources – 2015 Actuals Where does the money come from? Total Revenues Collected $363,449

  6. Library Revenue Sources Note: 2015 experienced a 3.6% decline in electric utility revenue compared to the prior year due to mild winter.

  7. Library Revenue Sources Note: 2015 experienced a 4% decline in gas utility tax revenue compared to the prior year.

  8. Library Revenue Sources Note: Telephone utility tax revenues declined 11% in 2015 compared to 2014.

  9. Library Funding Challenge • Revenue collected from the 2.5% telephone utility tax has been significantly declining since 2011 by over 25% • Increasing number of telephone customers eliminating their land line • Expansion of non-taxable data services by cellular phone service providers

  10. Library Expenditures – 2015 Budget Where does the money go? 2015 Total Budgeted Expenditures $432,267

  11. Library Expenditures Library Fund 121

  12. Library Expenditures Library Contract Fee Calculation for 2015 City of West Richland’s Assessed Valuation $1,008,958,750/$1,000 MCL’s Levy Rate $0.37281980 $376,159.80

  13. Library Expenditures

  14. Library Expenditures Library Contract Fee Paid to MCL Note: Contract fee has increased 5% annually on average over the past 5 years

  15. Library Fund Expenditures

  16. Library Funding Challenge • To balance the library fund budget, the City has had to make cuts to maintenance and capital expenses at the library facility and utilize reserves.

  17. Library Funding Challenge • In an effort to examine and analyze options available for library services, the City worked with Ruth Metz Associates to conduct a library services options study

  18. Library Funding Challenge • Library Options Study: • The most viable options for library services other than MCL is contracting with the City of Richland or with LSSI, Inc. Cost differences for operating the WR branch are significant among the District and alternative providers with MCL the least expensive option of the three. Note: Estimated collection and equipment costs for Richland is $543,000. These costs are included in the LSSI, Inc contract fee above which is estimated to be $60,000 a year.

  19. The Contract with MCL • In 2015, the City successfully negotiated a new library contract with MCL that provides additional services to WR residents at no additional cost • Expanded hours of service at the WR branch (49 hours Monday – Sunday) • MLIS-degreed manager to oversee the day to day activities • Remodel of the WR branch if the contract is extended another three years. A remodel of the WR Library would be similar to the remodel of the Prosser Library which was well received by their community. • Current contract commenced on January 1, 2016 and will expire on December 31, 2018. There is an option to extend the contract another 3 years.

  20. Library Fund Forecast Growing gap between revenues and cost of library services 4.5% The gap is growing Expenditures 2.5% Revenues Note: Data reflects 5YR actual average 2010-2014

  21. Library Fund Forecast Revenues • Gas Utility Tax • Anticipated to remain relatively flat with 1.5% growth per year • Telephone Utility Tax • Anticipated to decline on average 6% per year • Electric Utility Tax • Based on mild winter • Anticipated to increase 4% each year, projection includes a 7.7% Benton REA rate increase beginning in May 2016.

  22. Library Fund Forecast Expenditures • Anticipate 5% annual increase in MCL contract cost in outer years • Building and maintenance expenditures based on current budget using trend analysis • Does not include capital expenses for library facility

  23. Library Fund Forecast

  24. Library Blue Ribbon Committee • Formation of Library Blue Ribbon Committee ~ February 2016 • Committee purpose ~ To evaluate the library funding challenges, make a recommendation to the Mayor on how library services should be funded and assist communicating with our citizenry.

  25. Library Blue Ribbon Committee • Reviewed City Finances including General Fund Challenges • Funding options are limited and restricted by the state (property tax, utility tax, sales tax, and B&O tax) • Approximately 75% of the funds collected by the city are restricted by state/federal law for a specific purposes

  26. General Fund Overview Where does the money come from? 54% of general fund revenues comes from utility and property taxes

  27. General Fund Overview Where does the money go? 2015-2016 Biennial Budget $13.7 Million

  28. General Fund Revenue Where Your Property Tax Dollar Goes Richland School District 39¢ Fire District #4 16¢ City of West Richland 13¢ Port of Kennewick 3¢ Benton County 10¢ State Schools 19¢

  29. Why is it a challenge to balance the General Fund budget? • Lack of diversified revenue sources: • Heavy reliance on building revenues (extremely volatile) • Sales tax leakage (Queensgate) West Richland sales tax per capita is $49 compared to $153 area average (Richland, Kennewick, Pasco) Property Tax Utility Tax Retail Sales Tax

  30. Why is it a challenge to balance the General Fund budget?

  31. Why is it a challenge to balance the General Fund budget?

  32. Why is it a challenge to balance the General Fund budget? • Growing gap between revenues and cost of city services • Voter Initiatives (Ex: I-747 restricts city property tax levy increases to 1% annually) • Federal/State Mandates • Legislative Action (Ex: Reductions and elimination of state shared revenues)

  33. Library Funding Options Electric Utility Tax Increase • Levied on gross operating revenues earned by private utilities from operations within the boundaries of a city. • State law limits the tax rate that a legislative body may impose on electric, gas, and telephone utility taxes to six percent. A city may ask the voters to approve a rate of higher than six percent on these utilities.

  34. Library Funding Options Property Tax Levy Lid Lift • Property taxes are levied on all taxable real and personal property (unless specifically exempted) located within the city. • Amount of property tax is allocated based on an individual’s share of assessed valuation (Assessed valuation is determined by the Benton County Assessor’s Office) • Tax levy rates are expressed per $1,000 of assessed value • By law the maximum regular levy cannot exceed $3.60 per $1,000 of AV for all jurisdictions levying on property within West Richland. This limit is reduced by $1.50 to $2.10 because the City belongs to the Benton County Fire District #4. The City’s current levy rate is $1.55 per $1,000 assessed valuation.

  35. Library Funding Options Property Tax Levy Lid Lift How is the City of West Richland’s property tax calculated on an individual home? $1.55 $1,000 $387.08 West Richland’s portion of an individual’s property tax bill. $250,000 (Property’s Assessed Value by Benton County) West Richland Levy Rate 2016 Per Assessed Value Note: This example only includes the City’s portion of an individual’s property tax bill. Does not include, for example, School District, Fire District, County, etc.

  36. Library Funding Options Property Tax Levy Lid Lift • Since I-747’s one percent limit went into effect in 2002, the City’s tax rate has dropped by 26%. The 2016 levy rate is $1.55 per $1,000 assessed value.

  37. Library Funding Options Property Tax Levy Lid Lift • The City currently has $583,816 or $0.55 per $1,000 AV in maximum levy capacity. With voter approval through a levy lid lift, these funds can be used in the future for public services such as library, public safety, streets, and parks

  38. Library Funding Options Annexation into the Library District • Allows cities to join a library district, rather than contract for services • Citizens are taxed directly for library services through a property tax levied by the district • The library tax levy is capped at 50 cents per $1,000 assessed value (AV). MCL’s levy rate is currently $0.37 per $1,000 AV. • Annexation is initiated by the adoption of a city council ordinance • Library board of trustees would need to issue a resolution consenting to the annexation • Voter approval of annexation to a library district is by simple majority vote

  39. Library Funding Options Annexation into the Library District • If the City is annexed into the library district, levy capacity is surrendered to the library district up to $0.50 per $1,000 AV. • The City’s available levy capacity would be reduced from $583,816 to $189,956 if annexed into the library district. • This amount could be reduced further if library district voters approve an increase in the library district’s levy rate. • Withdrawlof annexed city – Must be approved by voters of the city at any general election held at least three years following the annexation to the library district.

  40. Library Building and Site Assessment ~ May 2016 • Assess overall physical condition of the building/site • Identify significant defects, deficiencies and items of deferred maintenance • Develop ten-year reserve estimate of costs for major capital improvements

  41. Next Steps • Website calculator to give citizens the opportunity to calculate personal impact of the funding options • Council Work Sessions ~ June 21st and June 28th 6:00 p.m. • Review and Discuss Library Blue Ribbon Committee Recommendation and Citizen input from Town Hall • Discuss Options

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